House of Representatives

Second Reading Speech

Mr Williams (Attorney-General)

I move:

That this bill be now read a second time.

The Customs Legislation Amendment Bill (No. 2) 2003 will make amendments to the Customs Act 1901, the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the trade modernisation act) and the Customs Legislation Amendment Act (No. 1) 2002 to address Customs activities involving the movement of imported and exported goods across the Australian border.

Part 1 of the bill contains an amendment to the `outturn reports' provisions to remove the requirement for stevedores to communicate nil cargo reports to Customs during periods where no containers are discharged from a vessel at a wharf.

An outturn report is communicated by stevedores to Customs and provides Customs with the ability to monitor cargo being unloaded from a vessel at a wharf.

Part 2 of the bill introduces an amendment to improve Customs' ability to control, monitor and examine high-risk export goods.

When the export provisions in the trade modernisation act commence, a report will have to be made to Customs when goods are removed from a wharf or airport otherwise than for export.

The amendment ensures that this report must be made to Customs before the removal of the goods.

Notification before removal will ensure that Customs is able to more effectively track the movement of high-risk goods, including goods that may be improperly diverted into the domestic market.

Part 3 of the bill concerns electronic communications. These measures are intended to apply to communications made for the purposes of acquitting import and export obligations under the Customs Act. They seek to re-establish provisions in the act for the attribution of client identity and non-repudiation of ownership of information communicated to Customs for import and export purposes.

Similar provisions have resided in the Customs Act since 1992 in relation to the various legacy systems, known as COMPILE, EXIT and the air and sea cargo automation systems. But the relevant provisions are inappropriately being removed by the items of the trade modernisation act that repeal the references to those legacy systems.

The repeal of those sections, combined with the operation of section 15 of the Electronic Transactions Act 1999, exposes Customs to a greater degree of uncertainty around the authorship of electronic communications and a greater risk of an author disowning a communication than that which exists currently.

Unlike the more generic electronic communications to which the Electronic Transactions Act applies, it is critical for ensuring the integrity of information relating to goods coming into and going out of Australia to have a means to establish with certainty who has sent the information to Customs and that the communication can be relied on in the form in which it was sent.

In part this will be achieved by the adoption of public key infrastructure technology, in line with the government's strategy for securing online transactions, but this amendment is necessary to underpin that practical solution.

Re-establishing these provisions will reduce risk, create a clear chain of communication and increase the overall level of clarity and confidence that all users will have in the relevant information systems.

The measures in part 4 of the bill clarify the operation of the Customs Act provisions relating to false and misleading statement offences.

The first two amendments recognise the variety of commercial communication arrangements available to people with obligations to report to Customs and also that the accuracy of the information in those reports can be affected in various ways at different stages of the communication chain.

The first clarifies that liability for offences of making false and misleading statements to Customs is not only on the person who communicates the statement but also on persons who cause the statement to be made.

The second measure makes a similar amendment in relation to record retention obligations in the Customs Act, so that all persons involved in preparing or sending communications to Customs will have to keep records that verify the content of the communication and identify the source of the information included in the communication.

The third measure clarifies the circumstances in which a `voluntary disclosure' can be claimed as a defence to strict liability offences for false and misleading statements.

For this defence to apply any disclosure must be made before Customs exercises a power to verify the information in the statement.

If the false statement was one that resulted in an underpayment of duty, the outstanding duty must also be paid for the defence to apply.

Also, the error notice must be given before a penalty infringement notice is served or proceedings commenced by Customs.

The fourth measure in this part clarifies that false statements made in refund and drawback applications will constitute an offence even if the refund or drawback is not paid.

Part 5 of the bill contains a technical correction to the Customs Legislation Amendment Act (No. 1) 2002 to ensure that a currently misdescribed amendment will be able to work.

Part 6 of the bill will reinstate the right to seek review of decisions relating to the administrative penalty scheme by the Administrative Appeals Tribunal.

This scheme existed prior to the commencement of the relevant parts of the trade modernisation act and was replaced by a new infringement notice scheme in July 2002.

Finally, part 7 of the bill contains amendments to establish effective arrangements for the transition between Customs legacy electronic systems and the new integrated cargo system.

Current legislation assumes that transition is possible within minutes of the legacy systems shutting down.

Following consultation with industry, Customs has responded to feedback that industry would favour a much longer transition period, and a period of up to 30 days is provided in the amendments.

The amendments will allow the export industry more time to both finalise transactions started in the legacy systems and to initiate new transactions in the integrated cargo system.

The amendments will ensure that the transition to new electronic systems will not hinder trade or increase the administrative burden on the export industry.

The amendments will also ensure that Customs' controls over the export of goods are not compromised during the transition.

The amendments will also allow the CEO of Customs to determine that transactions in the legacy systems that have not reached the final step may still proceed.

The CEO will only be able to exercise the power to determine if he is satisfied that exceptional circumstances for example, bad weather delayed, or will delay, the exportation of the goods.

A minor amendment will also suspend the new penalties for not reporting to Customs the delivery and receipt of cargo at a wharf or airport until the end of the transition period.

Similar transitional amendments relating to import transactions are intended to be introduced before commencement of the imports phase of the integrated cargo system.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Melham) adjourned.